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Summary of the ABLE ACT:

July 11, 2012

(S.313) -- Sponsored by Senator Robert Casey, Jr (D-PA)
HR.647-- Sponsored by Congressman Ander Crenshaw (R-FL)

Created under Existing 529 Codes for Qualified Tuition Programs 

  • Creates a new subsection (f) ABLE Account within Section 529 of  the Internal Revenue Code
  • ABLE in the 112th Congress has been re-drafted to follow all the requirements and regulations of a traditional 529 qualified tuition program
  • Easy to open and available in any state
  • Same annual contributions apply (After $13,000 gift tax rules apply)
  • Same tax-free treatment of account applies (Income earned grows tax- free, withdrawals for qualified disability expenses are tax-free)
  • Same reporting requirements apply as to a traditional 529
  • A beneficiary may have either an ABLE account or a traditional 529 qualified tuition program. (Multiple ABLE accounts or multiple 529 plans still allowed)
  • Rollovers allowed from an ABLE account to traditional 529 if beneficiary is no longer deemed disabled. (All other 529 rollovers apply to ABLE accounts)
  • Rollovers allowed to other family member’s ABLE account or their traditional 529

Qualified Disability Expenses:

  • Education- including tuition for preschool thru post-secondary education, books, supplies, and educational materials related to such education, tutors, and special education 6 services
  • Housing- Expenses for a pri­mary residence, including rent, purchase of a primary residence or an interest in a pri­mary residence, mortgage payments, home improvements and modifications, maintenance and repairs, real property taxes, and utility charges
  • Transportation- Expenses for transportation, including the use of mass transit, the purchase or modification of vehicles, and moving expenses
  • Employment Support- Ex­penses related to obtaining and maintain­ing employment, including job-related training, assistive technology, and personal assistance supports
  • Health Prevention and Wellness: Expenses for health and wellness, including premiums for health insurance, mental health, medical, vision, and dental expenses, habilitation and rehabilitation services, durable medical equipment, therapy, respite care, long term services and supports, nutritional management, communication services and devices, adaptive equipment, assistive technology, and personal assistance
  • Assistive Technology and Personal Support- Expenses for assistive technology and personal sup­port
  • Miscellaneous Expenses- Financial management and administrative services, legal fees, expenses for oversight, monitoring, or funeral and burial expenses